IN THE EARLIER HISTORY OF

AMERICAN CORPORATIONS

NUMBER IV

EIGHTEENTH CENTURY

BUSINESS CORPORATIONS IN THE

UNITED STATES

BY

JOSEPH STANCLIFFE DAVIS, PH.D.

INSTRUCTOR IN ECONOMICS, HARVARD UNIVERSITY

VERI
TAS

CAMBRIDGE

HARVARD UNIVERSITY PRESS

LONDON: HUMPHREY MILFORD

OXFORD UNIVERSITY PRESS

1917

HC D262

V.2

June 29,1917

GRADUATE SCHOOL OF
BUSINESS ADMINISTRATION.

COPYRIGHT, 1917

HARVARD UNIVERSITY PRESS

CONTENTS

BOOK TWO

CHAPTER I

INTRODUCTORY

Inclusiveness of the term "business corporation," 3. Colonial pro-

totypes and predecessors, and reasons for their paucity, 4. Conditions

after the Revolution favorable to the growth of corporations, 6.

General purpose of the present essay, 8.

Power of incorporation assumed by state legislatures, 8. A governor's

charter annulled, 9. Status of corporations with colonial charters, 9.

Incorporation powers of the Confederation Congress, in law and in

fact, 10. Proposals in the constitutional convention to give such powers

to the new Congress, 12. Attempts to secure constitutional restric-

tions on the power, 14. The test of the national bank charter, 14.

The case of corporations in the District of Columbia, 16.

Freedom of incorporation for non-business corporations, 16. Massa-

chusetts general incorporation act (1799) for aqueduct companies, 17.

North Carolina statute of 1795, relative to canal companies, probably

not in the same class, 18. Process of incorporation by special act, 19.

Variants from the usual method of incorporating, 20.

General view of eighteenth century charters: classification, distribu-

tion by years, types, and sources of charters, and relation to density of

population, 21. Corporations with more than one charter, 29. Busi-

ness cycles, 1781-1800, related to the growth of business corporations,

31. Material presented in this essay, 31.

PAGES

3-33

CHAPTER II

BANKING COMPANIES

Commercial banks lacking in the colonies, 34. The so-called Penn-

sylvania Bank, 35. Plan for a Bank of North America, 36. Table of
bank charters, 37. Vicissitudes of the Bank of North America, 39. Its
success, 43. The Bank of New York, 44. Early days of the Massa-
chusetts Bank, 46. The Bank of Maryland, 49. Movement for a bank
in Providence, 49. A national bank proposed, 50. Establishment of
the Bank of the United States, 51. Possibilities of a unified banking

V

34-108

system, by means of branches or inter-corporate relations, 52. The

decision in favor of a few branches in principal centers, and its conse-

quences, 56.

The Boston Tontine

Relations with the

The Essex Bank in

Virginia banks, at

Increase of banks and banking capital after 1789, 59. The Providence

Bank, 60. The New Hampshire Bank, 63. Connecticut banks at Hart-

ford, New London, and New Haven, 63. Prosperity and criticisms of

the Massachusetts Bank, 65. Resulting attempts to tax it, to modify

its charter, and to establish a state bank, 68.

Association, 70. It becomes the Union Bank, 72.

state, 74. Its early policies and practices, 75.

Salem, refused a charter, operates without one, 78.

Alexandria and Richmond, 78. The Bank of South Carolina, unincor-

porated until 1801, 80. The Bank of Albany, 80. The "bancomania"

in New York City (1792), 81. Hamilton's relations, while Secretary

of the Treasury, with the Bank of New York, 91. The Bank of Penn-

sylvania, the principal example of a state bank before 1800, 95.

Other banks chartered after 1792: Banks of Columbia at Hudson,

N. Y., and the new federal district, 97. The Bank of Baltimore, 97.

Massachusetts institutions at Salem, Nantucket, Newburyport, Port-

land (Maine), and Gloucester, 98. Rhode Island banks at Newport,

Bristol, and Westerly, 99. Connecticut charters for Middletown and

Norwich banks, 100. The Bank of Delaware, 100. The Manhattan Com-

pany's charter and bank, 101. Other attempts to establish banks, 101.

General considerations: naturalization of the bank in New England,

102; banking conducted largely by incorporated institutions, 102; bank

capitals and dividends, 103; charter provisions, 105; state participation

in banking, 107. Conclusion, 108.

PAGES

CHAPTER III

CORPORATIONS FOR IMPROVING INLAND NAVIGATION

109-185

Ante-revolutionary moves toward improving communication by

water, in Pennsylvania, 109; in Maryland and Virginia, particularly

the Potomac improvement, 111. General view of enterprises chartered

before 1800, 116.

The first corporation, Maryland's Proprietors of the Susquehanna

Canal, 117. Table of charters, 118. The Potomac project revived,

supported by General Washington, and chartered by Maryland and

Virginia, 120. State support for the Potomac Company, 123. Subscrip-

tion and organization, 125. Labor policies and problems, 126. Diffi-

culties of engineering and superintendence, 128. Financial problems,

130. Progress in construction, 132. Failure and factors responsible,

135. Chesapeake and Delaware canal, 136. The James River Com-

pany, 137. The Dismal Swamp Company, 140. South Carolina en-

terprises: the Santee and Cooper, 142; the Edisto and Ashley, 146; the

Catawba and Wateree, chartered also by North Carolina, 146. North

Carolina repeals its charter, 147.